The Internet of Things (IoT) is already here. But with 10 billion “citizens” – just 0.06 percent of physical objects – it has barely scratched the surface of what it may become, the influence it may exert, or the value it may create when another 1.5 trillion things join the community. Nevertheless, use cases for putting the IoT to work are plentiful including those in healthcare, smart buildings, higher education and transportation, among many others.
Cisco calls this the age of devices, and it’s gaining steam. The phase beyond this one and into decades to come will be the Internet of Everything (IoE), which is the confluence of people, processes, data and things. “IoE reflects the reality that business value creation has shifted to the power of connections and, more specifically, the ability to create intelligence from those connections,” Cisco authors wrote in a white paper, Embracing the Internet of Everything to Capture Your Share of $14.4 Trillion . “Companies can no longer rely solely on internal core competencies and the knowledge of their employees; instead, they will need to capture intelligence faster, from many external sources. This will occur through connections enabled by the Internet of Everything.”
Wait a minute, back up. Was that $14.4 trillion, with a t? You can count on one hand the world’s countries with GDPs greater than that. How do we get a piece of that?
Cisco did exhaustive research, surveying 7,500 decision makers in 12 countries to create its IoE Value Index and accompanying Value at Stake. The Value at Stake is a combination of increased revenues and lower costs created or captured across companies and industries from 2013 to 2022. The five sources are asset utilization, employee productivity, supply chain and logistics, customer experience and innovation, all of which contribute comparable amounts to the total. In other words, it’s $14.4 trillion up for grabs if you know how to get it.
Understand that this is a global phenomenon. More to the point, the IoE can place new-found power into the hands of companies of all shapes and sizes, in all industries, anywhere in the world to level the competitive playing field. Businesses that continue to use largely static information architectures will be caught flat-footed as innovators apply technology to create value in entirely new ways.
Echoing Cisco’s admonishments, an article by McKinsey & Company cautioned, “Now is the time for executives across all industries to structure their thoughts about the potential impact and opportunities likely to emerge from the Internet of Things.”
Looking at the drivers of the IoE may help business and IT leaders evaluate their own readiness and identify priority areas for investment.
- Dramatic increases in processing power, storage and bandwidth at lower costs
- Rapid growth of cloud, social media and mobile computing
- Big Data analytics for actionable information
- Shrinking form factors of computer, sensors and cameras can go where no technology has gone before
- IPv6 has essentially made universal connectedness a reality
Cisco points out that converting from proprietary-protocol networks to IP-based networks is a common first step.
All this is not without challenges, obviously. Legal, security and privacy issues, organizational structures and management methods, product development and marketing techniques are just a few of the many business evolutions that will occur. On the technology side, the McKinsey article points out that the current cost of embedded technologies (sensor, actuators) hamper widespread use. The free flow of data between things requires continued advancement of network technologies and standards creation. To harness the power of all this data, graphic display techniques and software to aggregate and analyze data must improve to the point where it can be consumed by human decision makers or synthesized to guide automated systems.
That said, it’s not a question of whether this is real but, rather, how soon companies must have strategies in place to leverage and profit from it. That would be now. Even as you define your other technology strategies now, doing so with an eye to the future in terms of application development, corporate readiness, systems integration, cloud deployments, data storage, analytics and the rest will position you and your organization better for the IoE…not to mention slicing off a piece of the $14.4 trillion pie.